Clive Maund - Sun, Nov 20, 2016

Silver Sector Buying Opportunity Develops

After taking a look at the ups and downs of the silver market pre- and post-election, technical analyst Clive Maund sees a major opportunity developing.

maundsilvercover_11-20

Silver had actually broken down from its uptrend at the time of last update, and well before the U.S. election. But it was thought to look positive going into the election because it was ascending off an important support level and from a rising 200-day moving average. The outcome may have been positive had Trump lost as expected, but he won, which triggered a sharp rally in the dollar and an about face and plunge in both gold and silver.

On silver's 1-year chart, we can see how silver was on the point of battling its way back into its failed uptrend at the time of the election. But Trump won and it caved in, breaking below an important support level and well below its rising 200-day moving average, which had earlier supported the price and set off a doomed rally.

Now silver has arrived at the lower boundary of a newly delineated downtrend, and is closing on the next important support level at a time when the dollar has arrived at an upside target. All this, plus the fact that the price is now below a rising 200-day moving average suggests a high probability that it will turn up soon. This is made even more likely by extremely low sentiment readings toward mining stocks, with the Gold Miners Bullish Percent Index (shown in the companion gold market update), at a very low 7%, which is way below where it was before the big sector rally started back last January.

maundsilver1_11-20

The advance by silver during the first half of the year is regarded as an impulse wave, or a move in the direction of the primary trend, because it broke the price clear out of a downtrend that had been in force from May 2011. As we can see on the 7-year chart below, it is in the process of swinging the direction of the long-term 200-day moving average from down to up, the classic signature of a change in the direction of the major trend, although this does not always work. It turned up in October 2012, at the time of a bull trap. But in this instance, we have a clear breakout from a long-term downtrend. Thus, the deep reaction of the past several months back to an important support level is viewed as throwing up a major sector buying opportunity.

maundsilver2_11-20

Clive Maund has been president of www.clivemaund.com, a successful resource sector website, since its inception in 2003. He has 30 years' experience in technical analysis and has worked for banks, commodity brokers and stockbrokers in the City of London. He holds a Diploma in Technical Analysis from the UK Society of Technical Analysts.

Disclosure:
1) Statements and opinions expressed are the opinions of Clive Maund and not of Streetwise Reports or its officers. Clive Maund is wholly responsible for the validity of the statements. Streetwise Reports was not involved in the content preparation. Clive Maund was not paid by Streetwise Reports LLC for this article. Streetwise Reports was not paid by the author to publish or syndicate this article.
2) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.

Charts provided by Clive Maund

InvestorsGuru.com publishes interesting contributor articles in addition to its own content. We have not verified any of the above details.

Sign-up at InvestorsGuru.com (or blog.InvestorsGuru.com) for our Small Cap Stock Observer newsletter, and to set-up your own My Portfolio, My Watchlist & Alerts and News by Email preferences, or to post at our AnyTicker.com Bulletin Boards. Free!

Please note that nothing in this report should be taken as a recommendation in any way, and that everything from InvestorsGuru.com is subject to the terms of our Privacy Policy and Disclaimer.

comments powered by Disqus

Detailed Quote Portal

symbol lookup | (TSX add :ca)

Membership Privileges

  • Investors Guru Small Cap Stock Observer - newsletter emailed monthly!
  • Featured Stock Profiles - emailed on occasion!
  • News by Email - as it's released, according to your My Preferences!
  • My Portfolio - login to view or update your holdings, or have it emailed daily!
  • My Watchlist & Alerts - login to view or update your stock radar list, and set price triggers for email alerts!
  • Bulletin Boards - no need to request boards, just Quote it! Social Sign-on & Share your ideas, observations & trends!
  • Find it all! Find it Fast! Comprehensive stock research webpages. No more endless clicking!

Email: (see Privacy Policy)
Password: (4-15 characters)
Username: (4-15, BB posts etc)

unsubscribe anytime


Bookmark and Share

 Subscribe in a reader

Our Mobile Site